Wednesday, July 28, 2021

July 14, 2021 - Medicare Advantage Plan for Some NYC retirees

On July 14, 2021 the Municipal Labor Council agreed with the City to adopt a Medicare Advantage (MA) plan (Emblem Health/Blue Cross) for targeted city retirees eligible for Medicare.

The retirees had no say in the decision, and it was all done in secret. The targeted retirees are not being given a choice. They will be forced into the MA plan. Retirees can opt out of the MA plan and stay in your current plan but the City will no longer pay the Senior Care basic coverage subsidy.

I find this strange since MA plans are voluntary. I don't see how the City can interfer with a retiree's Part B coverage without the retiree's consent. The City can offer the MA plan but I don't think they can force anyone into it. As a complication, there are currently 14 City medicare supp plans offered by the City to retirees with the Senior Care subsidy. The City will have offer all the plans effective as of 1/1/2022 with all the costs laid out clearly so that retirees can make an informed decision.

Wouldn't it be interesting if the City offered this on voluntary basis? Actually, they do but retirees have not keen on the option.

Targeted City Retirees

Targeted city retirees are Medicare eligible retirees who do not have spouses under age 65 or children under age 26. I suspect that this group will total about 55-60% of all city retirees, teachers at higher percent and police/fire at a lower percent.

For example, I estimate that each year 18% of new NYCERS retirees are targeted retirees. Eventually all these retirees will fall under the MA umbrella unless they continue to have beneficiaries outside the scope of Medicare. Slowly over time the percent increases but deaths are always cutting into the total retiree population.

This new plan will replace the Medicare supplement plan (Emblem/GHI – Senior Care) that the City pays for right now. Medicare supplemental plans are sometimes called medigap insurance. The City offers 13 other supplemental plans to Medicare eligible city retirees.

The City will still have to provide regular GHI (CBP) health insurance for retirees not covered by Medicare or retirees with spouses under 65 and/or children under 26.

The City's Obligation to Pay for Health Insurance - NYC Admin Code Section 12.126

The mandating statute for health insurance is listed below. It sure appears to me that the City is no longer paying for the health insurance for targeted retirees.

b. Payment of health insurance costs. Except as otherwise provided in section 12-126.1 and section 12-126.2 of this chapter, for city employees, city retirees and their dependents: * (1) The city will pay the entire cost of health insurance coverage for city employees, city retirees, and their dependents, not to exceed one hundred percent of the full cost of H.I.P.-H.M.O. on a category basis. Where such health insurance coverage is predicated on the insured's enrollment in the hospital and medical program for the aged and disabled under the Social Security Act, the city will pay the amount set forth in such act under 1839 (a) as added by title XVIII of the 1965 amendment to the Social Security Act;

Quotes from the City's press release

This is a quote from the July 14, 2021 City press release

The NYC Medicare Advantage Plus Program replaces the current Senior Care program, which is a supplement to traditional Medicare, as the program that is free to all retirees. Other buy up options, including the Senior Care plan and the HIP VIP program will remain available to retirees.

It does appear from the press release that Senior Care will still be available but the retiree will have to pay the basic coverage premium which the City has been paying for up till now. That should be an interesting amount.

It appears that the City will also continue to offer the other 12 supplemental plans but without the current subsidy.

Medicare retirees will still be paying for their Part D drug coverage which is most often handled by GHI or Senior Care for most Medicare eligible retirees. The new MA plan will offer option of paying for Part D drug coverage.

From the City’s press release:

Retirees will still be eligible for the reimbursement of the Medicare Part B benefit that they receive today.

This means that the City will still be refunding $1,800/yr. to every Medicare retiree and every Medicare covered spouse. I’m assuming the IRMAA premiums will also still be refunded. These can run up to $2,500/yr.

Cost Savings

From the City’s press release:
Implementing the NYC Medicare Advantage Plus Program will produce approximately $600 million annually in health care cost savings for the system. … The City spends over $1 billion a year on retiree benefits, including the Part B Medicare reimbursement, and this will help the City control those costs while improving the quality of care for retirees.

This may be the most critical part of the new plan. This decision is supposed to save the City money while keeping the same level of benefits for the targeted retirees. Retirees, however, will now have $15 copays for all doctor visits.

The savings are created by the City offloading its supplemental health insurance costs to Medicare via the Medicare Advantage program. With the MA plan, the City will not pay for the second level of insurance coverage that it currently provides to targeted city retirees. Medicare will now be paying for that coverage via the MA plan.

Do you get the feeling that Medicare is getting the short end of the stick along with the retirees? What happens if CSM wakes up one morning and sees that every employer is dumping their retiree health care costs on Medicare?

The City does not report what it currently pays for the individual Senior Care premium for basic coverage to Emblem Health for each targeted city retiree. It also doesn’t report the current premium for regular employees and non-targeted city retirees.

I suspect that the City will not report out the details of the new agreement with Emblem Health, the flow of funds from Medicare (CSM) to Emblem Health for this new MA plan, nor Emblem Health’s projected profit from the deal.

On a very basic level a MA plan privatizes Medicare. As such the retiree is dealing with a profit-making insurance company as opposed to CSM, the government entity which runs the Medicare program. Retirees will also be paying $15 copays starting 1/1/2022 both in the MA plan and in Senior care. This a new cost for retirees for every doctor’s visit. Designed to cut down on visits to the doctor and increase profits. If a retiree chooses to stay with Senior Care, not only will he/she have to pay the basic premium but also the new copays. This is what happens when you are not part of the decision.

Access to Doctors

From the City press release:

A major concern for retirees is whether they can keep their current doctors and hospitals in a NYC Medicare Advantage Plus Program. In the City’s Medicare Advantage Plus Program, a retiree can go to any doctor or hospital that accepts Medicare. It doesn't make a difference if that provider is in the insurer's network or not. As long as the provider takes payment from Medicare, they are obligated to accept the NYC Medicare Advantage Plus Program payment. That includes all the hospitals in the NYC area, including those at Memorial Sloan-Kettering and The Hospital for Special Surgery (HSS), and almost all hospitals nationally and 99.5% of all doctors. The program is a national program so it covers retirees in any State in which they work or reside and when they travel.

This is a very misleading statement. Doctors who accept Medicare will provide service, but you may have to pay for the full cost of the service and then submit a claim to Emblem Health for reimbursement. I suspect that this will happen a lot. This the big problem with MA plans along with the referral issue. This why many reirees stay away from MA plans.

Currently most doctors do accept Medicare. They submit their charge to CSM for the 80% payment for the covered service and usually attempt to collect the finally 20% from Senior Care. Only then do they send a bill to the retiree for the remainder of the charge. Doctors are comfortable with reimbursement from CSM. They tend to be wary of payment from MA plans.

City Budget - Retiree Health Insurance

Over the last five years the City has budgeted the following amounts for retiree health benefits:

  • 2022 = $1.693B
  • 2021 = $2.293B (orig. $0.268B)
  • 2020 = $0.779B (orig. $2.500B)
  • 2019 = $2.230B
  • 2018 = $2.170B
It would be very informative to get the itemized details and supporting data for these numbers. That is real transparency.

The City OLR site has new FAQ sheet on its website.

This is another info link from a AFSCME local for a MA plan implemented in Illinois Illinois.

Tuesday, June 8, 2021

Threat to Health Insurance for NYC Retirees.

The following is an opening to a recent news article:

Nearly 250,000 retired New York City employees and their spouses could have their health insurance changed to “Medicare Advantage” plans managed by private insurers as soon as July 1, New York Focus has learned.

Retirees, who are pushing to delay the switch, say they are worried that a switch away from their current Medicare plan could lead to dramatically higher out-of-pocket costs and a smaller network of providers.

“It’s a little frightening,” said Jane Roeder, a retired city administrator. “The word on the street is that these Advantage plans are fine as long as you don’t get sick, as long as you don’t need the chemotherapy that my friend is having right now, or radiation treatment, or infusion treatment, or skilled nursing.”

Currently the City provides health insurance to city employees (and their dependents) and continues to provide it to them when the employees retire. This statement is generally correct with some exceptions.

As reference, this is the current statute from the NYC Admin Code Section. 12-126.b:

b. Payment of health insurance costs. Except as otherwise provided in section 12-126.1 and section 12-126.2 of this chapter, for city employees, city retirees and their dependents:

* (1) The city will pay the entire cost of health insurance coverage for city employees, city retirees, and their dependents, not to exceed one hundred percent of the full cost of H.I.P.-H.M.O. on a category basis.

Where such health insurance coverage is predicated on the insured's enrollment in the hospital and medical program for the aged and disabled under the Social Security Act, the city will pay the amount set forth in such act under 1839 (a) as added by title XVIII of the 1965 amendment to the Social Security Act;

provided that such amount shall not exceed the sum of nineteen dollars and fifty-three cents per month per individual for the period beginning January first, nineteen hundred eighty-eight and ending December thirty-first, nineteen hundred eighty-eight, and

provided further however that such amount shall not exceed the sum of twenty-seven dollars and ninety cents per month per individual for the period beginning January first, nineteen hundred eighty-nine and ending December thirty-first, nineteen hundred ninety-one, and

provided further that such amount shall not exceed the sum of twenty-nine dollars per month per individual for the period beginning January first, nineteen hundred ninety-two and ending December thirty-first, nineteen hundred ninety-five.

Provided further, that such amount shall not exceed the sum of thirty-two dollars per month per individual effective January first, nineteen hundred ninety-six.

Provided further, that such amount shall not exceed the sum of thirty-eight dollars and seventy cents per month effective January first, two thousand and

provided further that each year thereafter, the City shall reimburse covered employees in an amount equal to one hundred percent of the Medicare Part-B premium rate applicable to that year.

At retirement, the retiree can generally pick any one of the insurance plans that are available to active workers. The retiree can also stay with the plan he/she was enrolled in while a worker.

There is no charge for the two standard insurance plans(GHI and HIP) , both for workers or retirees. Other plans may require payments from the workers or retirees.

When the retiree turns 65 and is not working for another employer, he/she is required to enroll in Medicare. At that point Medicare becomes his/her primary insurance plan and the City plan becomes secondary. At this point the cost to the City for the retiree's health insurance drops significantly. The retiree can pick original Part B Medicare coverage or a Medicare Advantage plan. If the retiree chooses original Part B Medicare, the City's health insurance acts as a medigap insurance plan for the retire. The retiree is, however, responsible for his/her own drug coverage.

Note: To be eligible for health insurance the retiree needs to be receiving a pension from one of the five city pension funds and have more than ten years of credited service in the pension fund (five years for old timers).

There are, however, many variations in the above description. In particular, when the retiree has a younger spouse and/or dependent children under age 26. The City insurance continues to fully cover the spouse and/or children even after the retiree moves over to Medicare coverage.

There are also wrinkles when the retiree is an employee of another organization and has health insurance from their employment. The retiree is not required to enroll in Medicare as long as the retiree continues to work with health insurance coverage.

City employees and retirees usually have to purchase drug coverage from the health insurance plan they elected to be covered by. Sometimes drug coverage is provided by a union welfare fund. At the start of Medicare coverage retirees have to pick and pay for a drug plan that meets Medicare Part D requirements. Again this component gets complicated by non-Medicare dependents.

Currently Medicare Advantage Plans are available to city retirees as alternatives to the Standard Part B Medicare coverage. I suspect that the participation rate is low of these plans but not trivial.

The main problem with Medicare Advantage plans is the fact that retirees are restricted in picking their doctors and costs fluctuate with usage. The NYC area creates particular problems with this issue. My own expirence using doctors associated with the hospital at New York State University at Stony Brook is that they do not accept Medicare Advantage plans. There are also significant variations in cost for MA plans based on geographical areas covered.

To say the least medical insurance is a twisted system that has evolved over the years.

In order to cut costs

In secret, the City and a group of unions, including DC-37 and the UFT, are trying to put together a plan to cut health insurance costs (benefits) for all city retirees. So far the specific details are not public. Allegedly the parties are negotiating with two insurance companies to provide a mandatory Medicare Advantage plan for all Medicare eligible NYC retirees. I'm not sure whether the police and fire unions are in on this deal. Aetna and Emblem Health are the two potential firms.

There is, however, no accounting model outlining the targeted cost savings for retirees, how the savings would be achieved or a breakdown of the profits that the Medicare Advantage carrier will make with the conversion. The City's health insurance costs have always been a murky area.

The union welfare funds make the picture even darker. These funds are audited by the City Comptroller. In October 2020, the Comptroller released a 2018 audit. Many of the welfare funds are in dire straights and need help.

Most of the health insurance money for both workers and retirees is being paid to Emblem Health/Blue Cross, one of the two insurance firms haggling over the new Medicare Advantage plan for the City. It would be very helpful to see a full health insurance cost breakdown.

The current Emblem Health Contract needs a hard analysis of what it is providing and what it is charging. This is the battleline for the City and health insurance costs, applied across the board for all workers and retirees, and not at the point where the cost for retirees drops because of the start of Medicare coverage.

This insurance program started back in the 1950's. It was a revolutionary idea back them but it has been allowed to deteriorate.

Below are the cost items that I was able to pull from the FY-2022 NYC Executive Budget:

  • FY-2021
    • Employee Fringe Costs
      • Health Insurance = $2.2B
      • Welfare Funds = $355.1M
    • RNBT Costs
      • Health Insurance = $268.5M
      • Welfare Funds = $201.5M
  • FY-2022
    • Employee Fringe Costs
      • Health Insurance = $1.7B
      • Welfare Funds = $538.9M
    • RNBT Costs
      • Health Insurance = $2.1B
      • Welfare Funds = $320.0M

The Retiree Health Benefit Trust, RFBT, was created in 2006 to pay retirees' current health benefits and build up a reserve fund to cover future costs.

In FY-2020, the City used $1.0B from the RNBT to cover budget short falls and in FY-2021, the City used $1.6B from the RNBT to cover budget shortages.

It looks like the FY-2021 RHBT amount, $268.5M + $1.6B reflect the annual costs for retirees health insurance benefits. It would be very informative to see the distribution of these costs are for 1) retirees not eligible for Medicare, 2) Medicare eligible retirees with spouse under age 65, or children under age 26, and 3) the remaining Medicare eligible retiree.

Possible Cost Scenario

For argument sake I am going to make some assumptions and sketch out a very simplistic cost scenario. I would love to see the actual spreadsheets outlining the costs, also the profit projections for the insurance firm.

Assume the City

  • is paying $15,000/yr. for health insurance for each retiree under age 65 and each Medicare eligible retiree with a spouse under 65 or child under 27.
  • is paying $5,000/yr. for the other Medicare eligible retiree over age 65 .
  • is paying $3,000/yr. for welfare fund benefits for all retirees.
  • is paying on average $2,000/yr. for Part B premium refunds for each Medicare eligible retiree and spouse.

With the Medicare Advantage plan the City will still pay $15,000/yr and $3,000 for all retirees under age 65 and retirees with spouse ubder 65 and children under 27. But for the targeted Medicare eligible retires, I strongly suspect that the City will no longer have to pay the $5,000/yr for the second level health insurance or pay a greatly reduced amount.

It is my understanding that Medicare will pay the Medicare Advantage firm the full cost of the Part A and B insurance coverage being provided by the firm. They actually get a bonus from Medicare for every retiree they cover. I'm not sure about the welfare funds. There is huge incentive for the unions to hold onto them. Let me restate i am doing a certain amount of guessing since the City and the MLC have not been out front.

From my quick review of some of the CAFR's for the city pension funds, I estimate that 90% of the TRS retiree, 50% of the NYCERS and BERs retirees and 30% of the police and fire funds will get whacked by this new MA plan. This limits the savings. But will the City tell the retirees what the savings are? I don't think so.

Mandatory Concept

Medicare Advantage is available to medicare eligible persons on a voluntary enrollment basis. It is not availiable to their spouses or dependents unless they are personally Medicare eligible.

This concept of forcing retirees from Part B Medicare to a Medicare Advantage plan is massively complicated. I suspect that the City can not force retirees to enroll in the MA plan but the City can stop insurance coverage if the retiree chooses to stay with his/her original Medicare Part B. In addition, for current retirees who are covered by Medicare and who choose not to join the MA plan, they may have problems signing up for medi-gap insurance because they missed the one time unrestricted enrollment period. For retirees who do not live in the NY metro area this new plan will cause extra problems. It will caues complications for current employees who are close to retirement and are close to or over 65. Current retirees will want to sue over loss of contracted benefits but I expect that will not be successful.

If you pick Medicare Part B at age 65 instead of the City MA plan, it appears that you will get no health coverage from the city. You will probably have to pay for a medi-gap insurance to cover what is currently paid by the city plans. That is if you can afford to.

It is not clear how current Medicare retirees will handle their Part D drug coverage plan. Most retirees are paying a premium for the Part D drug coverage as part of the City's genral Senior Care coverage If the retiree chooses to not elect the MA plan, will they be able to convert to a standard Part D plan run by Medicare or a qualifying third party plan. Medi-gap insurance may offer drug coverage at a charge. The City does not pay for qualifying Part D drug coverage.

In this case, if you exercise your right to pick Medicare Part B, which you have paid for through Medicare taxes your whole working career, the City will escape paying any health insurance/welfare fund benefits for you.

The City is claiming that doctors who accept Medicare Part B must accept Medicare Advantage plans. That is not true. They know it is not true. A large majority of doctors do not accept Medicare Advantage plans. Some doctors don't accept Medicare but most do throughout the country. This makes Medicare Part B almost a universal plan.

If you are currently an active worker and have been looking for doctor who takes GHI, you will have a good sense of how many doctors will take the new MA plan.

There are huge problems with medical coverage in the US. Most of them are cost based. If you cut costs, you usually cut benefits.

If the City wants cut its health insurance costs for retirees, it needs to up front and state what they want retirees to pay to cover some of the rising costs. Why doesn't the City just state clearly that they want retirees to pay $1,000/yr towards health insurance costs? What the City is trying to do is cut costs (benefits) to retirees but not be honest about the amount. The City is trying to perform a magic act.

Monday, May 24, 2021

Update: Appeal - June 10 - Nespoli Case - Trial Court Decision (May 11, 2021) - Tier 6 - Sanitation - Corrections - DA Investigators


The decision was appealed on 6/10/2021 -- Check index number = <159601-2016


Finally on May 11, 2021 the trial court issued a decision on the Nespoli Tier 6 case.

After four and half years the judge got it wrong and decidied in favor of NYCERS.

The five page decision was particularly flimsy considering that he took four and half years to write his decision. He basically said that NYCERS is the expert and he sees no reason to overturn the agency's decision.

He ignores the fact that the agency made one decision in 2012 and then changed its position in 2016. That does not sound like the agency is an expert.

He also ignores the NYS Constitution prohibiting the impairment of pension rights.

For argument's sake, let's assume that NYCERS got it wrong the first time. NYCERS should then have presented a well-reasoned explanation of why it changed its mind. The judge did not state any rationale presented by NYCERS supporting its change in position. He only quoted a definition from the Tier 6 law and said that the NYCERS interpretation of the definition was rational. He just deferred to NYCERS without any analysis.

Simple Analysis of the Tier 6 Law

I was the NYCERS expert for 14 years from 1990 to 2005.

Here is my analysis of the Tier 6 Sanitation/Correction/DA-Investigator Issue.

As background, the 2012 Tier 6 legislation was a 100 plus page law that tried to retrofit restrictions on many existing NYS pension laws instead of starting from scratch and creating a standalone tier with reduced benefits for new members. It would have been much easier to write the law and much easier to administer it.

Currently as part of the Tier 6 law,

Section 600 of the RSSL reads as follows:

§ 600. Application. a. Notwithstanding any other provision of law, the provisions of this article shall apply to all members who join or rejoin a public retirement system of the state on or after July first, nineteen hundred seventy-six and to all employees who would have been eligible to join or rejoin such a retirement system on or after such date but in lieu thereof elected an optional retirement program to which their employers are thereby required to contribute,

except the following:

1. Members of the New York state and local police and fire retirement system;

2. (a) Members in the uniformed personnel in institutions under the jurisdiction of the department of corrections and community supervision of New York state, other than certain persons as defined in this section or the New York city department of correction. ... 3. Members of the New York city police pension fund or the New York city fire department pension fund; 4. Members qualified for participation in the uniformed transit police force plan or housing police force plan in the New York city employees' retirement system;

5. Investigator members of the New York city employees' retirement system; and

6. Members of the uniformed force of the New York city department of sanitation who join or rejoin a public retirement system of the state on or after April first, two thousand twelve.

In the event that there is a conflict between the provisions of this article and the provisions of any other law or code, the provisions of this article shall govern.

Section 440.e of the RSSL reads as follows:

e. Notwithstanding any other provision of law to the contrary, the provisions and limitations of this article shall apply, as may be appropriate, to all investigator members of the New York city employees' retirement system

who last joined such retirement system on or after July first, nineteen hundred seventy-six, and

prior to the effective date of the chapter of the laws of two thousand twelve which amended this subdivision.

and Section 501a.6 reads as follows

25. "New York city uniformed correction/sanitation revised plan member" shall mean a member who becomes subject to the provisions of this article on or after April first, two thousand twelve, and who is a member of either the uniformed force of the New York city department of correction or the uniformed force of the New York city department of sanitation.

Quite simply Tier 6 clearly allows NYCERS members who join a pension plan prior to 4/1/2012 to stay in Tier 4 (or Tier 2) even if they become Sanitation workers (or DA-Investigators) after 4/1/2012.

Since 1983, the start of Tier 4, a NYC Correction Force worker have been exluded from Tier 4 and forced into Tier 3. So that a NYCERS member who joined a NY public pension plan before 4/1/2012 and then became a Correction Officer would have been forced into Tier 3 with his/her original membership date. This would mean that the member became subject to Article 14 before 4/1/2012 and therefore not fall under the definition of a revised plan member.

It is therefore clear that Tier 6 respected the NYS Constitution's pension protection. All the petitioners specifically joined a NY public pension plan before 4/1/2102. By the wording of the Tier 6 law, they are not included in the new Tier 6 pension benefit structure. There is no issue here. NYCERS needs a class in reading comprehension.

The Key Point

Of course, the key issue in this case is not the wording of the Tier 6 law but the protection of pension rights by the NYS Constitution. As of the date a person becomes a member of NYCERS, the NYS Constitution prevents all subsequent legislation from diminishing or impairng the member's pension benefits. That means that Tier 6 legislation can have no negative impact on pre-April 1, 2012 NYCERS members nor members of any of the other six NY public pension plans. This is black letter law in New York State. The judge never addresses the key issue in this dispute.

This decision must be appealed but time drags on for the members being pounded by NYCERS

Sunday, May 23, 2021

The Strange Budget History at NYCERS 1980 - 2022

In June of 2017, I wrote post about NYCERS's budget history and a recent explosion of spending. Since then the growth of budget has lost all touch with reality. I have added new data both current and historical. Currently I do not have access to the records from 1997 to 2004.

I will let the numbers in the table below speak for themselves.

Prior to FY-1997, the NYCERS admin budget was part of the overall NYC budget adopted by the City Council.

In 1996 the state legislature authorized the NYCERS Borad of Trustees to adopted the annual admin budget for NYCERS and to pay all expenses from the assests of the pension fund. From 1997 to 2005 the NYCERS admin budget increased by 294.25%. Most of that increase was in place by 2001, the year the dot-com bubble hit Wall Street. That, in turn, created pressure to keep the growth in the budget below the inflation rate.

It is reasonable to question the need for such a significant increase in the NYCERS admin budget over this nine year period, if you were not aware of what disparate shape NYCERS was in 1996.

It is, however, absolutely clear that NYCERS was radicallly well equipped to do its work in 2005, probably far better than any other city agency. As an example, in the aftermath of 9/11 attack, a major division of OMB worked out of the NYCERS's office for over 6 months. They thought they had died and went to heaven.

The FY-2006 budget was the last budget I prepared before I left NYCERS. It had a 1.4% increase. You will notice in the following year, FY-2007,a significant increase in staff.

On May 14, 2020 in the midst of the pandemic, the NYCERS's trustees adopted FY-2021 admin budget of $89.7M. Then, on Decemeber 10, 2020, the trustees increased that bduget to $98.3M, an $8.6M increase.

On April 8, 2021 the trustees adopted the FY-2022 admin budget of $135.7M, a $36.4M increase.

As of January 1, 2022 most of the publically elelcted trustees on the NYCERS Board of Trustees will be gone. The Mayor, the Comptroller and four of the five Borough Presidents will all be new people. One current Borough President and the Public Advocate wiil probably be on the ballot in November. Most likely,four years from now all of the public trustees who voted for this qusetionable $135.7M budget will be gone.

History of NYCERS Admin Budget 1987-2022
Fiscal Year F/T Count P/T Count College Aides / Hourly PS Budget OTPS Budget Fringe Total % Increase
1980 21900 $3,558,977 $1,079,851 na $4,638,828 na
1981 22200 $3,507,806 $1,020,374 na $4,528,180 -2.39%
1982 22000 $3,970,212 $1,177, 748 na $5,147,960 13.69%
1983 22400 $4,429,362$1,230,672 na $5,660,034 9.95%
1984 23100 $5,026,847 $1,194,237 na $6,221,084 9.91%
1985 23900 $5,446,600 $1,241,976 na $6,688,576 7.5%
1986 247030 $5,916,793 $1,423,743 na $7,340,536 9.76%
1987 245030 $6,621,803 $1,881,300 na $8,167,220 11.26%
1988 265030 $6,621,803 $1,881,300 na $8,503,103 4.11%
1989 285030 $7,849,731 $1,932,351 na $9,782,082 15.4%
1990280030 $8,284,883 $2,578,693 na $10,863,576 11.06%
1991229030 $6,826,473 $2,475,205 na $9,301,678 -14.38%
1992225030 $6,646,549 $2,216,262 na $8,862,811 -4.72
1993 223030 $6,858,991 $2,198,882 na $9,057,873 2.20%
1994 194030 $6,778,541 $2,183,101 na $8,961,642 -1.06%
1995 167030 $6,202,062 $2,080,504 na $8,282,566 -7.58%
1996 154030 $6,199,709 $2,573,715 na $8,773,424 5.93%
1997 200030
2005 342 13 30 $19,737,687 $14,851,355 $3,887,624 $38,476,666 295.25%
20063421330 $20,255,911 $14,683,855 $ 4,076,823 $39,016,589 1.01%
2007 364130 $22,616,783 $14,258,471 4,375,788 $41,251,042 5.73%
2008 371130 $23,597,857 $17,259,313 $4,799,066 $45,656,236 10.80%
2009 371130 $25,189,842 $18,208,861 $4,879,903 $48,278,606 6.22%
2010372120 $26,046,827 $17,777,228 $5,362,640 $49,186,695 1.88%
2011372120 $26,046,827 $18,492,228 $6,006,573 $50,545,628 2.76%
2012372120 $25,756,827 $18,781,428 $6,603,649 $51,122,139 1.14%
2013380520 $26,623,635 $17,951,822 $7,532,499 $52,107,956 1.93%
2014383530 $26,813,635 $18,761,240 $7,669,819 $53,244,694 2.18%
2015392530 $29,131,972 $18,154,572 $7,915,476 $55,202,020 3.68%
2016 392350 $30,233,989 $19,407,619 $8,155,517 $57,797,125 4.70%
2017 401350 $31,056,080 $20,916,796 $8,605,288 $60,578,164 4.81%
2018 411350 $31,704,410 $21,832,718 $9,194,015 $62,731,143 3.55%
2019 428 35 0 $33,592,612 $43,532,302 $10,344,565 $87,469,479 39.44%
2020 438 27 16 $35,262,139 $45,862,557 $10,689,350 $91,814,046 4.97%
2021 438 27 16 $36,842,549 $50,210,145 $11,283,945 $98,336,639 7.10%
2022 474 27 16 $38,397,943 $85,531,063 $11,719,465 $135,648,471 37.94%

Monday, May 17, 2021

The New York Times Reports on Problems with Alternative Investments for Public Pension Funds

On May 12, 2021, the New York Times printed an article critquing the alternative investment decisions of the Pennsylvania Public School Employees Retirement System (PSERS).

As background, read the following post about NYCERS's alternative investments.

Tuesday, May 4, 2021

IBM and the Legacy Replacement Project

In April, IBM released a presentation, Myth versus reality - Modernization on IBM Z, outlining the firm's strategy for upgrading IBM's traditional mainframe systems.

The main thrust of the presentation is that converting to other platforms is significantly more expensive than upgrading the mainframe platform. Of course, IBM has a vested interest in this claim but the firm's arguments match up with my experience in building systems over the years.

As reference, in 2016, I helped a client convert from in-house AS/400 based application system to a a third party MS Sequel Server based industry oriented application system. The implementation required customization but the conversion was relative simple because the new application was already written and the old AS/400 system functioned on a very basic flat file system without overwhelming transaction volume.

The NYCERS situation, however, is radically more complex with massive transaction volumes. In addition the new application is not yet written.

IBM also has published a short five page document listing the problems that conversion projects run into Problems with Offloading Data.

Saturday, May 1, 2021

Transit Hint – Tier 4 – Age 62 – Non-Transit Service

In the Tier 4 Transit 25/55 Plan only service (operating force or clerical) with the Transit Authority counts towards the full benefit payable under the Plan.

This creates a problem for a member with other than Transit service. Military service is an exception.

Example 1

In a common scenario, A member starts working for the city at age 25 and switches over to the Transit Authority in an operating force position at age 30.

In the Transit 25/55 Plan that member is eligible to retire at age 55 with a 50% benefit. The 50% is based on his 25 years with Transit.

The member gets no value from his 5 years at the city from age 25 to 30. Once the member has the 25 years of Transit credited service, there is no way to avoid the loss of the five years, but the member is able to retire at 55 without age reduction that applies to 62/5 members.

Example 2


Consider the following different scenario - A member starts working for the city at age 35 and switches over to the Transit Authority in an operating force position at age 40.

Under the Transit 25/55 Plan, this member can only to retire at age 65 with a 50% benefit. The 50% is based on his 25 years with Transit. The member gets no value from his 5 years at the city from age 35 to 40.

This member can, however, retire one week before he attains his 25 years at Transit. His benefit will a standard a 62/5 Plan benefit, 60% benefit (based on all NYCERS credited service). The key is not to have 25 years of Transit credited service.

This sounds crazy but it is how the law was written.

Note: Unfortunately, Transit Plan members are not eligible for early retirement under the 62/5 Plan. The enacting law specifically excluded Transit Plan members. So the comment below is not applicable.

Depending on how much non-Transit service the member has, it might even make sense to retire before 62 to avoid the 25-year threshold , absorb the reduction but get all credited service.

NYCERS should be laying out these scenarios for its members. NYCERS’s has a duty to its members to warn them of pitfalls in the law.